Brent Tops $91, WTI Rises on Strait of Hormuz Attack

Global oil prices rose early Tuesday, with Brent crude topping $91 per barrel, after an attack on a vessel in a critical Middle Eastern shipping lane heightened supply disruption fears.

The U.S. benchmark, West Texas Intermediate (WTI), was trading at $84.16 per barrel, up 0.5% or $0.42 from the previous close. The international benchmark, Brent crude, was at $91.03, a gain of $0.16. North Dakota Bakken crude traded at a discount of $3.42 per barrel to WTI, according to live price data.

The immediate catalyst was an incident in the Strait of Hormuz. According to OilPrice.com, a cargo vessel was struck by an unknown projectile early Tuesday local time while transiting the Strait. The United Kingdom Maritime Trade Operations reported the impact damaged the engine room and resulted in a crew casualty.

"This incident close to the Omani shores... took place amid heightened security concerns," OilPrice.com reported, noting that declarations by Iran and the U.S. earlier in the week have made prospects for peace in the region more distant. Analysts at ING said prices were supported by "renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions."

The Strait of Hormuz is the world's most important oil transit chokepoint, making any security incident there a direct concern for global crude supplies and prices.

Further supporting the market is a structural shift in supply from a major producer. Rigzone reported that analysis from Rystad Energy indicates Russia's crude oil production has entered "a new era of constraint." While details were sparse in the summary, sustained production limitations from a top-three global producer provide a underlying floor for prices.

For Bakken operators and royalty owners, the rise in the global benchmark directly improves netbacks, even as the local differential remains. A Brent price above $91 strengthens the global pricing complex against which Bakken crude is ultimately valued. The geopolitical risk premium, driven by events in the Middle East, can lead to increased volatility but also higher average selling prices for barrels shipped to coastal refineries or exported.

The combination of immediate geopolitical tension and longer-term supply constraints continues to frame a supportive, if uncertain, price environment for shale producers. The key question for the market, as posed by a separate Rigzone headline, is whether prices will keep rising as Iran tensions threaten global crude supply.

Natural gas prices also saw a modest increase, trading at $2.72 per barrel, up $0.03.